Sparks fly in AT&T/T-Mobile debate

One opponent vowed that the fight against AT&T’s bid to acquire T-Mobile will “be a battle to death.”

A supporter countered that T-Mobile’s on the block, anyway — and a unionized, financially strong AT&T is the best suitor.

Story Continued Below

So went a spirited debate Tuesday morning over the proposed wireless mega-deal convened by the Broadband Breakfast Club, a Washington-based news organization focused on broadband issues.

Setting the tone with the “battle to death” remark was Caressa Bennet, general counsel of the Rural Telecommunications Group, which represents small rural carriers. Bennet went on to express skepticism about AT&T’s promise to build out next-generation wireless to 97 percent of the country.

AT&T has been sitting on spectrum in rural areas for decades without developing it, she said.

If the deal goes through, Bennet said it will further weaken rural carriers’ competitive position against Verizon and AT&T.

Two ongoing gripes that smaller carriers have with AT&T and Verizon — negotiating reasonable rates for data roaming and obtaining interoperability of wireless networks — could be exacerbated if the transaction goes through, Bennet said.

Debbie Goldman, of the Communications Workers of America, which represents AT&T employees, said the deal would ensure the brightest future for T-Mobile and its workforce.

“The question really is: What is the best future for the assets of T-Mobile?” said Goldman, a research economist for the union. “It’s our view that AT&T, a financially strong and healthy company” with the “most trained employees” should “use those assets and move forward in our broadband world.”

Lost in the debate, Goldman said, is that T-Mobile USA is up for sale — with or without AT&T. She said that Sprint and a hedge fund, which she declined to name, were the only other parties interested in purchasing T-Mobile from parent company Deutsche Telecom.

Goldman is in a position to know about the potential fate of T-Mobile. CWA has a close relationship with Ver.di, the German labor union that represents T-Mobile workers in Europe and has a seat on Deutsche Telecom’s board.

Handset exclusivity was another point of contention. Opponents of the deal worry that without T-Mobile, AT&T will be the exclusive buyer of mobile phones, which operate on GSM wireless technology.

Under that scenario, AT&T will have a monopoly in the GSM handset market — a situation ripe for exploitation, critics said.

“I was at the FCC when AT&T said you couldn’t buy your own telephone,” said Alan Pearce, the commission’s former chief economist.

But Justin Hurwitz, a former attorney in the DOJ antitrust division, argued that handset exclusivity is generally thought of as a “pro-competitive arrangement.” It allows more handsets to reach a wider population faster than they otherwise would, said Hurwitz, now a professor at George Mason University School of Law.

One point that the panelists did agree on is that the Justice Department and the FCC should conduct a thorough review of the deal.

Hurwitz said Justice will spend months collecting data, and Pearce estimated that a decision won’t come before June 2012.

This article first appeared on POLITICO Pro at 2:44 p.m. on May 17, 2011.